Transcript: Rex Tillerson, ExxonMobil CEO

The following is a transcript of Charlie Gibson's exclusive interview with Rex Tillerson, chairman and chief executive of ExxonMobil, examining the oil crisis in this country, for ABC News' "World News With Charles Gibson," Aug. 13, 2008.

CHARLES GIBSON: Mr. Tillerson, you probably know the oil markets as well as anybody. If you can factor out speculation, and you can factor out emotion, what should the price of oil per barrel be right now?

REX TILLERSON: Well, Charlie, that's really a difficult question to answer, because there are so many factors that influence the price. And, obviously, oil is based on the fundamentals, though, of global supply and demand. Oil is a global commodity. And you've mentioned a couple of things that do have a significant impact on the price. And, certainly, the strength of the dollar plays an important role, because oil is priced in dollars the world over.

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If you look at just basic fundamentals of supply and demand, clearly we've been at a price level that, my view has been for some time, is not reflective of strictly fundamental supply and demand, but also is reflective of a lot of uncertainty about the future of supply that you can attribute to any number of causes.

CHARLES GIBSON: Well, we're taught in college that markets are rational. And, yet, with demand increasing about 4 percent a year for oil, we've had a doubling of price in the past year. That doesn't seem rational.

REX TILLERSON: Well, this market has been demand-driven, because of the expansive growth that's gone on in these very rapidly growing developed economies around the world, the ones we're all familiar with -- China, India -- but also rapidly developing economies elsewhere. So this has been a demand-driven price phenomenon. And...

CHARLES GIBSON: But the increase in price is far greater than the increase in demand.

REX TILLERSON: Well, demand has gone up from 2001...

CHARLES GIBSON: Right.

REX TILLERSON: ... through this last year from 77 million barrels a day to 85 million barrels a day. So that is a very rapid run-up in demand at a time when supply has not been capable of responding as quickly. That is always the case. There are significant lead times involved in bringing large supplies of new crude oil on. And so there has been a supply lag in the ability to supply to respond.

CHARLES GIBSON: But you talked about a 10 percent increase in demand over those years. And we've had a far, far greater -- we've had a multiple in the price of oil over that period of time.

REX TILLERSON: Well, again, it's all dependent upon that strong demand pull that's going on in these rapidly growing economies.

CHARLES GIBSON: We learned today that Americans drive 12.5 billion fewer miles in June of this year over June of last year. Where's the price of gas headed?

REX TILLERSON: Well, again, hard to say, but clearly the high price is taking its effect on the American people. It's very difficult, we know, for families, particularly families that are dealing with tight household budgets already, to accommodate the kind of high price that they've had to deal with. And that has been the response that we would expect is that Americans would be wise. They would begin to find ways to reduce their demand, economize their trips, cut back on their consumption to deal with that high price.

In the meantime, allow us to get to work to respond with additional supplies around the world where we're able to gain access to develop new supplies and bring new supplies of gasoline and motor fuel on.

CHARLES GIBSON: But you know the markets. Is that kind of a decrease in driving habits going to have an impact on gas prices?

REX TILLERSON: Well, I think it already is having an impact on gas prices. Again, as the markets try to price looking forward, the commodities of crude oil and natural gas and gasoline, the products that we use, it's looking -- the market is looking at supply-demand. And this demand response, I think, the market now has taken note of. And that's why I think you're beginning to see them. We have seen a fairly rapid rundown in crude oil prices just in the past couple of weeks.

CHARLES GIBSON: And will that continue in terms of crude oil prices? Goldman Sachs made the prediction that oil prices could be $200 a barrel.

REX TILLERSON: Well, yes, I'm not in the business of predicting prices. We never have been, because we've never been any good at it. But what I can make the observation is that the demand response is having an effect. New supplies are being brought on around the world. Supply is up in the month of July, approaching nearly 88 million barrels a day of oil available in the world. And so those two working in combination with the third very important factor, the strength of the U.S. dollar, are having their effect. And I think that's why we're seeing the oil price now coming down.

CHARLES GIBSON: Do you understand, and can you appreciate from your position with the escalation of the price of a gallon of gas, why people are fed up, angry, indeed disgusted with the oil companies?

REX TILLERSON: Well, I can understand why people are very upset and why they're very worried and concerned about their ability to deal with these high prices. In terms of where they should direct their anger, I don't think it's useful for me to comment on that; although it does bother me that much of that is directed at us.

Our job is to provide energy, to provide it in a means that is reliable. And we hope we can provide it in a means that's convenient as well to the consumer. And that's what we're continuing to do.

CHARLES GIBSON: Former senators had the temerity to say the other day Americans are whining. Are they whining? Or do you really -- can you, from where you are, feel their pain?

REX TILLERSON: No, I don't think it's whining, Charlie, because I don't think there's any question that if these prices -- $3.50, $4 a gallon for gasoline -- and the follow-through effects on the cost of electricity, that this is causing a lot of problems for a lot of Americans, again, who their budgets just are very difficult for them to accommodate this. And they don't have other options. Much of the world, certainly here in Texas where you're visiting, we do not have large mass transportation systems. And so people don't have a lot of other options than to get in their car and have to drive to get about their daily requirements.

CHARLES GIBSON: You and some of the other people in the oil business have said look, you've got to understand that markets drive the price. It is a market-driven economy. But is there nothing that ExxonMobil can do to make gas more affordable for the average Joe?

REX TILLERSON: Well, what we can do is add new supply and to provide means for people to use the energy more efficiently, which will help reduce demand. And that's what we're spending a lot of our effort doing, is working on both sides of the demand equation and the supply equation. And it's by providing new technology, new capabilities.

On the demand side, we want to provide means for consumers to use energy more efficiently. And that's in a lot of simple things, like providing lighter-weight tires, tires that retain their pressure more efficiently, lighter-weight plastics to go into vehicles to reduce vehicle weight; and, on the supply side, finding new ways to access energy where we are allowed to go and bring the technology to bear on new sources of energy to provide increasing supplies in the future. Fundamentally, that's all that's going to affect prices over the long term are the impacts of lowering demand and increasing supply.

CHARLES GIBSON: But you mentioned a couple of times supply now. Let's talk about that a little bit. There's a growing concern among a lot of the academicians who look at your profession that the curves of demand, new demand for oil, and the curve for new supply, new oil sources coming online, that the demand curve is going up faster than the supply curve. IEA says we'll be having a shortfall by 2015. Other people say 2020. Are we in a position where we're going to have demand outstripping supply soon?

REX TILLERSON: That's not our view of the future. The global endowment of oil and natural gas resources is clearly sufficient to meet the growth and demand that almost any economic forecast would foresee. Give you an example, Charlie, of how things have changed over the years. In 1950, the U.S. Geological Survey estimated the world's endowment of conventional oil at 1 trillion barrels. Fifty years later, the U.S. Geological Survey now estimates that endowment to be 3 trillion barrels.

What changed? Well, in 1950, the people making those estimates did not foresee the impact of technology on increasing the resource base. And I would say the same is true today. In many of the forward forecasts of people who are looking at future supply, it is myopic again; and they're not properly accounting for the impact that technology will have on making new supplies available.

CHARLES GIBSON: Fifteen years ago, the numbers I've seen, we were taking 15 percent more oil out of the ground each day than we were using. You just mentioned we're pulling about 87 million barrels a day out now. We're using 85 million. That's about a 2 percent cushion there. Doesn't that make us hostage to geopolitical developments in a lot of parts of the world, particularly in Saudi Arabia?

REX TILLERSON: Well, the traditional supply surplus, if you want to call it that, over the last 15 or 20 years has been in the range of 3 million to 4 million barrels per day. Now, to develop that kind of capacity requires enormous investments. So who should we expect to invest to develop supply that sits idle? That's a very difficult question. Now certainly, in the United States, we've been unwilling to develop the resources available here. So we're not contributing to developing supply and certainly not contributing to develop a cushion, as you point out. So where do we want to look? What country do we want to hold responsible for that cushion that you just described?

CHARLES GIBSON: But aren't we, in effect, hostage to political developments in those areas? You look at Georgia just in the last couple of days. And you're worried because of that pipeline, maybe that's going to unsettle oil prices. Any kind of dislocation with Saudi Arabia would be catastrophic in this country.

REX TILLERSON: Well, the response to that, what you're really onto, is a very important point, is you're onto the point of energy security.

CHARLES GIBSON: Sure.

REX TILLERSON: And I think the response to that is to have as many diverse supplies of energy as possible. And that means both in terms of geographic diversity. You want to expose yourself or certainly have access for the American people to as many different geographic sources of supply as possible. So the disruption in one area does not leave you, as you point out, hostage to any one area.

Secondly, though, you also want to expand your sources of supply in terms of developing all the alternatives that are available. And that's why the long-term answer, Charlie, is really we've got to develop everything. And to be making -- trying to pick winners and losers and make choices that say we have to get off this in order to get onto that, that's not a sustainable long-term policy. And it's not going to provide the answers that we're looking for.

CHARLES GIBSON: We in the media have made a lot of the profits that ExxonMobil has made, particularly in the last couple of quarters -- more than $10 billion in profits first quarter this year; more than $11.5 billion in the second quarter of the year. When people, I don't know, complain about that to you or say how dare you? Those profits are obscene. What's your best -- in brief form -- what's your best justification?

REX TILLERSON: Well, I think it has to do with an ability to understand just the size of our business. Everything we do, the numbers are very large. I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost. We spend $1 billion a day just running our business. So this is a business where large numbers are just characteristic of it.

CHARLES GIBSON: When profits are so high, why is spending on exploration so low?

REX TILLERSON: Well, we're spending at record levels. Through the first half of this year, we have spent $12.5 billion. That's a record level of capital and exploration expenditures for us. We expect we will spend about $25 billion this year. And we have forecast over the next five years that we will invest $125 billion in capital and exploration expenditures. And to give you some perspective on that, that's a little more than half of what all 13 OPEC nations are going to invest as they've announced. So we are investing at record levels and expect that we will continue to be doing that in the years ahead.

CHARLES GIBSON: You're spending more money buying back stock than you are on exploration.

REX TILLERSON: Well, that's a cash flow question, Charlie, in terms of how should we manage our cash flow. And that's important for our shareholders, obviously. It's important for our future health as well.

The first thing we do is invest in all the projects that we have available to us and that make sense to invest in. And the second thing we do is pay all our taxes, pay all our operating costs, all of our employees and all the people that do business with us. And then we see what's left over. And what's left over we try to return efficiently to the shareholder, because it's their money. So we do that through dividends, and we do it through share buybacks. Our shareholders then take all that money, and they're doing something with it elsewhere in the economy.

CHARLES GIBSON: The numbers I have seen: 1993, 1 percent of your profits were going to buybacks; 2000, it was 30 percent; 2007, it's 55 percent going to stock buybacks. While in the same time, the percentage on exploration, flat. The percentage of profit on exploration, unchanged.

REX TILLERSON: Well, again, that's a function of the opportunities available to us. But we are spending at record levels. And we're going to continue to spend at those very healthy levels. But we have to have good opportunities in which to invest. And we're not going to just spend the money because it's there. That would be not using the money wisely, which, again, belongs to our shareholders.

So, again, our investment levels are at record levels. We're continuing to invest heavily in new technologies to support those investment levels. And we'll continue to do so.

CHARLES GIBSON: The oil companies have campaigned for more access, more leases on public lands for exploration. And a lot of people ask why don't you use the leases you have?

REX TILLERSON: Well, we are using the leases we have, Charlie. I think this whole issue belies a failure of understanding around how oil and gas are discovered, explored for and developed. You know, you lease up large areas of acreage. And you really don't know what's there. And so then you conduct a lot of exploratory activities. And you hope to find something in some part of that acreage. So most of the acreage that's under lease does not contain commercial oil and gas quantities. It's the nature of exploration.

In our own case, 78 percent of the acreage that we have leased is actively being explored, developed, produced, under study. And the remaining part that's not, the remainder of that 100 percent is due to expire in the next year. And it will be returned back to the federal government.

CHARLES GIBSON: Ninety-one million acres, I believe, under lease to the major oil companies; 68 million unused at the moment. Is that...

REX TILLERSON: Well, that's not an accurate characterization, again, in terms of unused. It means either that acreage has already been explored and evaluated, and there's nothing there to be produced or developed. And, again, at the end of the lease terms, these acreage -- these leases are turned back to the federal government, where they can be leased again if others want to look in areas where others have not been successful. But the rest of the acreage is actively being studied, explored or waiting to be developed.

CHARLES GIBSON: Let me talk politics with you for a little bit, because energy is very much in the political sphere right now. Americans use roughly a little bit more than 20 million barrels of oil a day. The numbers I've seen, we will produce in this country a little over 5 million barrels next year. That leaves us with a deficit just under 15 million barrels a day that we have to get from outside sources. We keep hearing from politicians that we need to get energy independent. Is that a pipe dream?

REX TILLERSON: Well, I think energy independence is not realistic for the United States or almost any other country. Even exporting countries are not independent of many of their needs. But also I'm not sure that it's even desirable for the United States to pursue that as a goal. Our country's economy is so interdependent with the rest of the world in so many areas of, not just commodities, but capital markets. And to create the jobs that have created the prosperity in this country has been because we have remained integrated with the global economy. So I'm not sure why we would view energy any differently than the way we view the rest of our economy.

CHARLES GIBSON: So Barack Obama said the other day, "Follow my policies, and in 10 years," I'm quoting, "we will eliminate the need for foreign oil from Saudi Arabia and Venezuela." Is that even in the realm of possibility?

REX TILLERSON: Well, first of all, you have to understand how much of our oil comes from Saudi Arabia and Venezuela. And it's not as much as most people think. First of all, I think it's important that Americans remember the United States is still the third largest producer of crude oil in the world, only behind Saudi Arabia and Russia. So we are a significant producer of oil ourselves.

CHARLES GIBSON: But we're only producing 25 percent of what we use.

REX TILLERSON: And that's because we have a very healthy economy, which requires a lot of energy. Now, in terms of what we should be doing, we should be developing, again, all the supply sources and all the options that we can develop in a way that's efficient and is going to provide energy at a cost that Americans can afford. And that does get to the question of are we doing everything here at home that we could be doing. And I think most people have come to the realization that, for many, many years, the United States has not fully developed its own natural resources.

CHARLES GIBSON: But even if you had the leases to drill in Anwar, and you had -- you could pick any place you wanted off the coast of the United States to drill, you're still not going to be producing 50 percent of what we use.

REX TILLERSON: No, that's true, Charlie. We are going to continue to require imports of our energy for as long as anyone can foresee, certainly well into the middle of this century. And that's why I think it's important that we take a thoughtful approach as to how we want to manage those future energy supplies. But, certainly, anything that we produce at home does relieve the pressure for those imports in the future. So it's not that that is unimportant by any means. Again, our sources of supply around the world are from many different countries. And I think it's important that we maintain the diversity of supply to manage that energy security of the future.

CHARLES GIBSON: But that makes Americans quite upset, the idea that we're -- first of all, that we're sending that much money overseas; and, secondly, that we have to be dependent on oil-producing nations. But let me come back to what he's saying. Is that even in the realm of possibility that you can eliminate in 10 years the need for -- may it be limited -- Saudi Arabian and Venezuelan oil?

REX TILLERSON: I think it's going to be very challenging to achieve that goal, Charlie, in that period of time. And, again, so much of the energy issue that the United States deals with and the world deals with, people I think do not have an appreciation for the lead times that are required. The energy complex is enormous. And when you talk about the kinds of numbers that you're talking about, it takes a number of years to replace those supplies, to bring new supplies on. And it would certainly take a number of years on scale to be changing out crude oil for something else.

CHARLES GIBSON: John McCain, for his part -- it's become a mantra for him: Drill now, drill here, drill immediately. Is that any kind of a solution?

REX TILLERSON: Well, it's part of a solution. Again, I think this whole debate around someone looking for the solution is not a sensible approach. As I've pointed out, we really have to attack this problem from both sides, emphasize energy efficiency to reduce our demand, or certainly reduce the growth of our demand. And we've been very good at that in this country. Our energy intensity for GDP of output is really quite efficient. And we have a track record of continuing to improve that. And we should continue to emphasize that in the future.

And then, on the supply side, we really should be developing all the supplies that are available to us regardless of whether they come on tomorrow or they come on 10 years from now. They're going to be important, because we're going to continue to need those.

CHARLES GIBSON: T. Boone Pickens is a fellow who made a considerable dollar in your business. He says this is not a problem in any way that we can drill our way out of. Correct?

REX TILLERSON: I would agree with that. We can't drill our way out of this problem, just like we can't conserve our way out of this problem, just like we can't alternative fuels our way out of this problem. And that's my point, Charlie. There is no one solution to this. There's an integrative set of solutions. And you have to undertake them all. So when the whole debate focuses around we have to choose this one solution or that, people are missing the point. The problem is too large. It's just too enormous for a single solution to provide the answer. And we really have to put in place steps to pursue all of the options available to us, because we're going to have to have all of the options in the end.

CHARLES GIBSON: Let me stay in the political realm for a moment, come back to Sen. Obama. He's calling for a windfall profits tax, $65 billion, five years. Oil companies, in his plan, pay it. And when the public sees the kind of profits that the oil companies are making, and ExxonMobil in particular, and when they see the size of the stock buybacks, isn't it fair that they wonder why not?

REX TILLERSON: Well, I guess the question is what's that going to solve? Are the American people going to be better off from an energy situation because we implement a windfall profits tax? Nowhere in a windfall profits tax do I see anything that addresses the problem. I understand that may be popular with some people because of how they view our current-day profitability. Certainly, again, if you put our profits in perspective, because of our scale and our size, Charlie on a unit-of-sales basis, our profits are way down the list.

And so if we're going to institute, from a philosophic standpoint, a windfall profit on highly successful companies, who generate high profits, you're going to have to go after a lot of other industries and parts of our economy before -- and you'll work your way a long way down the list before you'll come to oil companies as being the most profitable.

CHARLES GIBSON: Well, I'm a -- I'm a guy in a diner in Pennsylvania, and I'm deciding what I feel about this issue. And I see a company that's buying back stock at record levels. And I'm thinking why not have the government take that money?

That's benefiting a lot of stockholders in Exxon, but money comes for an energy rebate, as Obama's talking about, and that presumably benefits everyone.

REX TILLERSON: Well, again, I understand why that's popular, particularly when the energy prices are so high today and a lot of people are struggling with it.

But, again, Charlie, I think the question is are we going to have a serious debate about solving the long-term energy problem, or are we just going to look for short-term solutions again to make everybody feel better?

And I'm very concerned that that's where we've been for so long -- much of our history over the last 25 years, as we've been unwilling as a country to look at the long-term solutions that have to be put in place, recognize that there are no short-term solutions, there are no easy answers in the next three, four, five years, and that what we have to put in place is an energy policy or strategy and then stick with it.

Through election cycle over cycle, we have to stay with it, because it's going to be a 20-year solution.

CHARLES GIBSON: So is it fair to say -- I don't mean to put words in your mouth -- fair to say that you don't think much of either the Obama energy policy or the McCain energy policy?

REX TILLERSON: Well, I think they both have elements of what could be a successful long-term strategy for this country.

But, again, the -- I think the real challenges are we -- are policymakers going to put in place all of the elements, which means that there is no one solution, and so there can be no one winner and one loser -- whether there has to be an accommodation of all of the options that are available, and then put those in place and stick with them through good times and bad times.

CHARLES GIBSON: So in this universal approach that needs to be taken -- the Tillerson policy here -- what's your energy policy been?

REX TILLERSON: Well, first it -- it does -- it starts with a real emphasis on energy efficiency. That's the easiest form of energy to create. The quickest is to use less. And now you've freed up another barrel of oil to be used elsewhere.

And, again, I think, you know, we are taking a lot of steps to continue our energy efficiency in this country. And we at -- in our company at ExxonMobil have taken a number of technology steps to provide ways for consumers to use energy more efficiently.

The second element of the policy, then, is to develop all the supply options available to us. Oil, natural gas and coal, whether people may like that or not, are the dominant source of supply today.

And 30 years from now, by anyone's forecast you want to examine, they will continue to be the dominant source of energy.

So we cannot say we're going to opt for an alternative elsewhere at the expense of oil and natural gas, because oil and natural gas are going to take us to that future.

Then we begin to examine and evaluate other alternative sources of energy, replacement fuels, renewable fuels. We're going to have to bring nuclear back onto the table in this country, because it's too important for power generation.

And the last element of this, obviously, is how do we do all of this and accommodate the serious environmental concerns that the country and the world has with our use of energy.

And that is all going to be enabled through technology. And it's technology on the supply side, such as technologies that we've been developing in finding new oil and gas resources, to energy efficiency technologies like we've been developing, to technologies that will allow us to deal with the car emissions.

We're investing $100 million in a pilot plan this year to examine a new technology to separate CO2 from gas streams, which we hope will hold promise for CO2 capture and sequestration in the future.

So the policy has to accommodate all of those requirements that we as a society need and that we're going to have to have for decades ahead.

CHARLES GIBSON: When you talk that way, you're essentially saying Exxon is not -- ExxonMobil is not a oil company; it's an energy company.

REX TILLERSON: Well, we've always talked about ourselves as an energy company, but let me be clear, too, Charlie. The most important energy source that we provide the world today is oil and natural gas.

CHARLES GIBSON: Understood. But to be ahead of the curve in the world, and where we're going in the kind of conservation you're talking about, shouldn't the investments that you're making in alternative energy be a heck of a lot bigger than they are now?

REX TILLERSON: Well, in alternative energy sources, we are investing in a lot of technology development. We have looked at all of the currently available technologies to develop and produce biofuels, solar, wind, and a lot of those technologies that are in use today and being deployed are fairly mature.

So for ExxonMobil to make a meaningful difference, we've really got to find a way to change those technologies to provide those alternative forms of energy on a much larger scale and at a cost that people can afford.

It doesn't do the consumer a lot of good to substitute an alternative fuel that costs $5 for gasoline that costs $4. And so what we're expending a lot of our efforts on are next generation of biofuel technologies, ways to produce solar more efficiently in the future to bring that cost down, and that's where a lot of our research activities are devoted.

And we're supporting a lot of external research activities through academic institutions to look for these kinds of breakthroughs.

CHARLES GIBSON: But I can quote you the percentage that you're spending on alternative fuel development...

REX TILLERSON: That's because we haven't found an alternative to invest in, Charlie, that makes a lot of sense for us.

Again, we're going to look for options that will make a meaningful difference, and to just throw money into an alternative source because it might be popular for us to do so, but wouldn't be a good use of our shareholders' money, would be irresponsible on my part.

CHARLES GIBSON: But isn't that where you need to be -- come back to this -- where you need to be, to be essentially ahead of the curve of where we're going in terms of energy utilization 20, 30, 50 years down the road?

REX TILLERSON: Well, again, where we need to be 20, 30, 50 years down the road is continue to be the most efficient producer and most environmentally responsible producer of oil and natural gas, to develop the next generation -- which is not available today -- the next generation of replacement fuels for the future.

And we're doing this in a number of ways, including things like our lithium ion battery film separator, separation film which is going to enable the next generation of electric vehicle and hybrid vehicles.

It includes things like our research into onboard hydrogen reforming that may facilitate the future of a new hydrogen vehicle, which has 80 percent higher fuel economy, using conventional fuels, and 45 percent lower greenhouse gas emissions.

That's where our research efforts are devoted today. And those things we believe will deliver in the future, but it's going to be a few years out yet.

CHARLES GIBSON: What's your gut, as a -- as a educated observer of the business that you're in? What's the alternative -- predominant alternative -- we'll use for -- for energy -- non-transportation -- in the home?

Pickens is betting on wind. What do you think?

REX TILLERSON: Well, again, I don't think there will be a dominant. The dominant energy source in the future will continue to be oil and natural gas.

But, in terms of the alternatives, again, I think it's going to be a mix of things, because there is no one alternative today that can deliver on scale the amount of energy that people require.

Wind is going to be important. Biofuels will continue to be important. There will continue to be good advances in solar energy as well.

And, again, back to my earlier point, this problem is so enormous you're going to need all of it. And for people or policymakers to pick one as being the winner is really shortsighted.

CHARLES GIBSON: Anticipating what I was going to tell you -- we -- we won't get into this, but I'm -- one of the things I'm curious about -- I wound up interviewing the secretary of state yesterday about -- about Georgia and about the situation with Ossetia and Abkhazia and the Russians, and I'm thinking I'm going to go talk to the head of Exxon tomorrow. They essentially must have their own state department.

You must have essentially a -- an operation that -- that you're -- you're tracking -- well, you -- you're not just tracking energy considerations or energy developments in various parts of the world, but you're also tracking geopolitical developments as well.

REX TILLERSON: Absolutely. It's part of our, you know...

CHARLES GIBSON: Who's your secretary of state?

REX TILLERSON: Well, there's not -- there's no single. We have people in countries all over the world.

CHARLES GIBSON: Sure, sure.

REX TILLERSON: And then we have people in-house who -- some of who have come out of -- of government in the past and have a lot of background -- background in these areas.

CHARLES GIBSON: Yes. I was thinking you must have an awful lot of people who've come out.

REX TILLERSON: Yes, not -- we have a -- there's very selected. I mean, we're going to try to get people that have particular knowledge and expertise in parts of the world.

CHARLES GIBSON: Yes ... and is there a most promising alternative fuel for transportation?

REX TILLERSON: Well, there's not one that's evident today. Certainly, the choices that are available and are being made available today in terms of the biofuels do come with a lot of their own consequences in terms of water resource usage, land resource usage, other collateral impacts that -- that I think do concern people.

So, again, I think that's why we are devoting a lot of our own research activity and supporting a lot of research activity through academic institutions and others, looking at what are the next generation of possible transportation fuels.

And that could come from a wide variety of potential sources in the future that certainly we hope would not impact food resources and certainly would not impact other important natural resources either.

CHARLES GIBSON: I mentioned that Americans drove 12.5 billion fewer miles last month than the same month a year ago. $4 a gallon gas -- have you cut back?

REX TILLERSON: Personally, have I cut back?

CHARLES GIBSON: As the president and CEO or the chairman of the -- of the board and -- and CEO of ExxonMobil, have you cut back?

REX TILLERSON: Well, I don't drive very much as it is, other than back and forth to the office, so not a lot of vacation miles to be driven.

But I think in terms of all of us, again, using energy wisely, it's -- I think it's on everyone's mind, as it should be, and I think that's good.

In many -- in many respects, if you can look for the bright spot out of the situation that's been very difficult for so many Americans, I think it has brought sharply into focus just how important our energy resources are and how important it is that we use them wisely.

CHARLES GIBSON: I'm trying to find out about you, though. As the chairman -- as the chairman of the board and the CEO of Exxon, do you have to drive up to the pump like everybody else?

REX TILLERSON: Oh, sure, yes. I have to drive up to the pump and swipe my credit card and watch the numbers go around. And it's always a bit astonishing.

CHARLES GIBSON: What do you think of these prices?

REX TILLERSON: Well, I think they're high, you know, and I think they're -- and, again, I know they're difficult for people. I -- I have friends and neighbors and people I see at church, and so I know how. You know, I hear from people. I know how tough this is on them.